BlackRock plans to offer tokenized versions of selected European money market funds through JPMorgan’s blockchain infrastructure.
The initiative will use JPMorgan’s Kinexys platform to tokenize certain fund shares denominated in British pounds, euros and U.S. dollars.
Three Currency Share Classes Included
According to a Bloomberg report, the offering will include sterling, euro and dollar share classes from BlackRock’s Institutional Cash Series.
The wider Institutional Cash Series manages approximately $311 billion in assets. However, this figure represents the full fund range rather than the amount that will be tokenized.
Only selected shares from the fund series will initially be available in tokenized form.
How the Tokenized Fund Shares Will Work
Each digital token will represent ownership of one share in an underlying BlackRock money market fund.
Approved users will be able to transfer these tokens between authorized digital wallets at any time of the day.
This round-the-clock transfer capability could make money market fund shares easier to use for payments, liquidity management and collateral.
JPMorgan’s Kinexys platform will provide the blockchain and tokenization infrastructure.
Meanwhile, JPMorgan will continue to act as the transfer agent responsible for maintaining official fund ownership records.
Demand Grows for Digital Collateral
BlackRock said interest in tokenized money market funds is growing among digital wallet providers, corporate treasurers and capital markets participants.
Beccy Milchem, BlackRock’s global head of cash distribution and international cash management, said these groups are looking for more efficient ways to manage and transfer collateral.
Traditional collateral transfers can depend on banking hours and settlement processes. Tokenization may allow approved participants to move eligible fund shares more quickly.
Peer-to-Peer Transfers Attract Companies
Hannah Winter, BlackRock’s head of digital cash, said peer-to-peer transfer capabilities have attracted interest from businesses exploring internal payment systems.
Companies could potentially use tokenized fund shares for payments between subsidiaries or different parts of the same organization.
This could help businesses improve liquidity management while keeping cash invested in money market instruments.
However, participation will remain limited to approved wallets and eligible institutional users.
BlackRock Builds on Its BUIDL Fund
BlackRock previously entered the tokenized cash-management market with the launch of BUIDL in 2024.
BUIDL is a U.S. dollar-denominated institutional liquidity fund that operates through blockchain-based infrastructure.
The fund has since grown to approximately $2.67 billion in assets, according to data from RWA.xyz.
Its growth has demonstrated increasing institutional demand for tokenized real-world assets and blockchain-based cash-management products.
Tokenization Gains Ground in Traditional Finance
The European launch highlights the growing connection between traditional asset management and blockchain technology.
Tokenized money market funds can combine the yield and liquidity features of conventional funds with faster digital transfers.
They may also allow institutional investors to use regulated financial assets more efficiently within blockchain-based markets.
The partnership between BlackRock and JPMorgan could encourage other major financial institutions to expand their own tokenized investment products.
